Liquid Net Worth: What it is, Why it Matters, and How to Calculate It
Most people have heard of the term net worth and many also have a good understanding of it and what it means. Net worth is quite simple; the total amount of an individual’s assets, including any and all cash, minus the total amount of their liabilities or what they owe. So, net worth is the value by which a person’s assets exceed their total liabilities (or net worth can be a negative number if liabilities exceed assets). But determining a person’s liquid net worth is perhaps a better tool to use to evaluate a person’s financial health. → Related reading:
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Do you calculate or track your liquid net worth? If not, you should. This article explains what liquid net worth is, and why it's so important. Although regular net worth gets a lot more attention, liquid net worth is probably a more important metric that indicates a great deal about your financial health.
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